We review more than 150 banks and credit unions each weekday to find the best certificates of deposit (CD) rates available nationwide. The top picks have the highest rates for a particular term based on annual percentage yield (APY) and are available to the public.
We also look at certificates of deposit with slightly shorter and longer terms than each category we’ve named to determine the overall best CD rate within a range. For example, for the best 3-month CDs we considered products with terms of two to four months.
When multiple banks or credit unions offer the same rate, we favor those with the lowest minimum deposit and friendly early-withdrawal policies. We track APYs daily but re-evaluate the list weekly, and all accounts that make our list are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Administration.
Here are the best CD rates available as of Jan. 21, 2021.
Best CD Rates
|Best 3-Month CDs (2–4 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Chevron Federal Credit Union||0.60%||$500||3 months of interest|
|Spectrum Federal Credit Union||0.60%||$500||3 months of interest|
|BrioDirect||0.50%||$500||3 months of interest|
|For more, see our best 3-month CD rankings.|
|Best 6-Month CDs (5–9 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|CommunityWide Federal Credit Union||0.75%||$1,000||Complex formula; exercise caution|
|NASA Federal Credit Union (9 months)||0.75%||$10,000||All interest earned up to 182 days|
|La Capitol Federal Credit Union||0.70%||$2,500||3 months of interest|
|For more, see our best 6-month CD rankings.|
|Best 1-Year CDs (10–14 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|State Department Federal Credit Union||0.80%||$500||All interest up to 180 days|
|Lafayette Federal Credit Union||0.80%||$500||6 months of interest|
|Bank of Baroda (12–23 months)||0.80%||$1,000||All earned interest|
|For more, see our best 1-year CD rankings.|
|Best 18-Month CDs (15–20 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Greenwood Credit Union (15 months)||0.85%||$1,000||6 months of interest|
|CommunityWide Federal Credit Union||0.85%||$1,000||Complex formula; exercise caution|
|Bank of Baroda (12–23 months)||0.80%||$1,000||All earned interest|
|Best 2-Year CDs (21–29 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Georgia's Own Credit Union||1.00%||$500||6 months of interest|
|MAC Federal Credit Union||1.00%||$1,000||3 months of interest|
|Georgia's Own Credit Union (22 months)||0.97%||$500||6 months of interest|
|For more, see our best 2-year CD rankings.|
|Best 3-Year CDs (30–41 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Georgia's Own Credit Union||1.10%||$500||9 months of interest|
|MAC Federal Credit Union||1.10%||$1,000||3 months of interest|
|American Heritage Credit Union||1.10%||$1,000||12 months of interest|
|For more, see our best 3-year CD rankings.|
|Best 4-Year CDs (42–53 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|MAC Federal Credit Union||1.25%||$1,000||3 months of interest|
|Affinity Plus Federal Credit Union||1.20%||$500||12 months of interest|
|Georgia's Own Credit Union||1.20%||$500||12 months of interest|
|Best 5-Year CDs (54–66 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Affinity Plus Federal Credit Union||1.50%||$500||12 months of interest|
|The Federal Savings Bank||1.35%||$500||12 months of interest|
|Hiway Federal Credit Union||1.35%||$25,000||12 months of interest|
|For more, see our best 5-year CD rankings.|
|Best 10-Year CDs (114–120 months included)||APY||Minimum Deposit||Early Withdrawal Penalty|
|Apple Federal Credit Union||1.00%||$500||1,095 days of dividends|
|EmigrantDirect.com (60–120 months)||0.70%||$1,000||6 months of interest|
|My Savings Direct (60–120 months)||0.70%||$1,000||6 months of interest|
|For more, see our best 10-year CD rankings.|
If the logo for Chevron Federal Credit Union looks a little familiar, there’s a good reason why. The credit union was founded in 1935 and has more than 100,000 members. It primarily serves members employed by the Chevron Corporation (i.e., the gas stations you’re probably familiar with). If that’s not you, and you don’t qualify through other means, a $15 donation to join the Contra Costa County Historical Society also makes you eligible for membership. Additionally, you’ll need to keep $25 in a savings account, which is a tad bit higher than most credit unions.
In addition to Chevron FCU branches in California, members have access to more than 5,000 CO-OP branches and 85,000 fee-free ATMs nationwide. Chevron FCU also offers checking and savings accounts, loans, and other services.
For more information on the banks and credit unions offering the best 3-month rates, see our list of the best 3-month CD rates.
CommunityWide Federal Credit Union was founded in 1967 and is based in northern Indiana. If you don’t live in the area or meet its employment-based membership criteria or have a family member who’s already a member, you easily can join by becoming a donor member of a partner organization such as the Marine Corps League of St. Joseph Valley, which starts at $15 per year. You must deposit $5 in savings. It’s also part of the CO-OP shared branching network.
For more information on the banks and credit unions offering the best 6-month rates, see our list of the best 6-month CD rates.
Eight U.S. State Department employees helped launch State Department Federal Credit Union in 1935. Headquartered in Old Town Alexandria, Virginia, the credit union offers membership to anyone associated with dozens of partner organizations, in addition to State Department employees. As of January 2021, the credit union boasted more than 86,000 members and $1.9 billion in assets.
For more information on the banks and credit unions offering the best 1-year rates, see our list of the best 1-year CD rates.
Founded in 1948, Greenwood Credit Union is a Rhode Island-based institution that boasts more than $450 million in assets. It offers business accounts alongside personal offerings such as checking, savings, and money market accounts, credit and gift cards, loans, and CDs with 3-month to 5-year terms. The credit union has more than 50,000 members, and the open membership means you don’t have to be affiliated with any particular organization to become one of them. Just open a savings account with $5 to start using its products and services.
Based out of Atlanta, Georgia’s Own Credit Union has been around since 1934 and has about 200,000 members and $3 billion in assets as of December 2020. While living in certain parts of Georgia is one way to qualify for membership, you also can join by first becoming a member of the Getting Ahead Association for $5 or Georgia’s Own Foundation for $10. As with most other credit unions, you’ll also need to keep at least $5 in a savings account in order to keep your membership active.
MAC Federal Credit Union offers members financial products like checking, savings, and money market accounts, credit cards, insurance, and more. Originally founded in 1952 to serve the active duty and civil service personnel in Fort Wainwright, Alaska, the credit union is now open to anyone who purchases a two-year membership to the Association of the United States Army for $40. When applying for the membership, just change the chapter to the Polar Bear Chapter in Fort Wainwright, Alaska.
In 1930, a group of Minnesota state employees formed what is now Affinity Plus Federal Credit Union. Anyone nationwide can join with a $25 membership for the Affinity Plus Foundation, which provides scholarships and grants in Minnesota, and a $10 deposit in savings. When it’s time to spend your money, you can transfer funds into a free checking or rewards checking account.
For more information on the banks and credit unions offering the best 5-year rates, see our lists of the best 5-year CD rates.
Apple Federal Credit Union was founded in 1956 and has branches in northern Virginia. But customers nationwide can access accounts and use shared locations (including more than 53,000 ATMs) through shared branching. If you’re not already eligible to join the credit union, you can qualify by joining the nonprofit Northern Virginia Athletic Directors, Administrators, and Coaches. NVADACA, which supports student athletes, offers membership at $20 per year. To get started with Apple Federal Credit Union, you’ll need to open a savings account with at least $5.
For more information on the banks and credit unions offering the best 10-year rates, see our list of the best 10-year CD rates.
What Is a CD?
A CD is a “time deposit” that pays a fixed interest rate for a specific length of time. For most people, a CD is an account that you use at a bank or credit union, but you can also purchase CDs through brokerage accounts. Either way, you select a length of time to invest in the CD, and you earn interest during that time.
How Do CDs Work?
A CD holds your money for a specified length of time (such as six months or two years), and your bank or credit union pays you interest based on the amount of your deposit and the length of the term.
When you use a CD, you typically commit to leaving your money in the account. In return for that commitment, banks usually pay higher interest rates than they do in more liquid savings accounts. But if you need your money before the term ends, you may have to pay an early withdrawal penalty.
How Do Early Withdrawal Penalties Work?
Banks and credit unions often penalize you for withdrawing funds from a CD before the term is up. In many cases, they calculate the penalty as a certain number of months’ worth of interest. For example, Discover Bank charges six months’ worth of interest if you pull out of a 1-year CD early. That penalty increases to 18 months’ worth of interest on 5-year CDs.
Paying a penalty is never fun, and it can be particularly problematic when you cash out early in the term. Depending on how long your money stays in a CD, you might even receive less back than you originally deposited.
What Are the Pros and Cons of CDs?
Higher interest rates than savings accounts
Earnings won’t change if interest rates drop
Must lock up your money
Potential early withdrawal penalties
Might get stuck with a low rate while other interest rates rise
Pros explained: CDs often pay higher interest rates than you can earn in a savings account. Banks and credit unions tend to pay more when you agree to lock up your money for a specific length of time. Plus, if interest rates fall (and the bank pays new customers lower rates), you keep earning the same higher APY throughout the term of your CD.
Cons explained: To earn a higher rate, you need to commit to leaving your money with the bank. Pulling out early may result in early-withdrawal penalties, which can wipe out your earnings. Also, if interest rates rise, you may be stuck with a relatively low rate until your CD matures.
How Can You Manage These Risks?
To help reduce your risk, some banks offer liquid CDs that allow you to withdraw funds early or request a rate increase. But there’s no such thing as a free lunch. Those products might start with lower rates than standard CDs, which is only fair, considering you can get out easily. More on that in the No-Penalty CD section below. You can also use a laddering strategy to manage some of the challenges that come with investing in CDs.
What Is a CD Ladder?
A CD ladder is a set of multiple CDs you purchase with different maturity dates, which helps you avoid locking up all of your money at once. With that approach, you might purchase a series of CDs with maturities in six-month increments. As a result, you periodically have cash available for planned (and unplanned) needs, or you can buy a new CD at the going rate. For example, if you have $10,000 to put into CDs, you might invest the following:
- 6-month CD: $2,500
- 12-month CD $2,500
- 18-month CD $2,500
- 24-month CD: $2,500
Ideally, every time one of these CDs matures, you would buy a new 24-month CD with the proceeds to begin the cycle again.
Rates might be higher or lower when you reinvest into a new CD, but constantly cycling your money could still have benefits. You maintain flexibility and avoid putting all of your money into long-term CDs at a bad time.
Is Money Safe in a CD?
When your funds are federally insured, they’re safe from bank and credit union failures. There may be a brief delay in receiving your money (or no delay at all) immediately following a bank failure, but when you’re using CDs, you’re probably weren’t planning to use the funds immediately anyway. To verify that your cash is protected, look for the following types of coverage:
- FDIC insurance at banks
- NCUA coverage at federally-insured credit unions
Both of these programs insure your money up to $250,000 per depositor, per institution, so it’s critical to keep your balances below the insured limits. You might be able to have more than $250,000 insured at one place, depending on how your accounts are titled.
What Influences CD Rates?
Several factors affect how much you earn from a CD. For starters, banks decide how competitive they want to be. If they have an appetite for new customers, they may nudge rates higher. Economic factors also influence CD rates. As rates rise or fall in financial markets, savings and CD rates tend to move in synchrony, although they might not react immediately (especially when it’s time to pay you more).
The length of your CD is critical. In general, you might expect longer-term CDs to pay more because you’re taking more risk—you’re committing to more months or years of unknowns. But the relationship is not always as direct as you might think. For example, if banks think rates might fall in the next several years, long-term CDs might pay rates that are similar to (or lower than) 1-year and 2-year CDs.
As a rule of thumb, long-term CDs have higher rates than short-term CDs. Still, it’s worth comparing rates from several banks for any terms you’re interested in.
What Should You Look for in a CD?
As you shop among banks, find a CD that’s the best fit for your finances. Pay careful attention to the features below.
- Interest rate: The higher the rate, the faster your money grows. The easiest way to compare rates is to use the annual percentage yield (APY), which banks typically provide for you. That quote takes compounding frequency into account and helps you make an apples-to-apples comparison.
- Minimum deposit: How much do you need to invest to use a CD? Some banks do not set any minimum, while others might require more than $1,000 to get started.
- Fees: Monthly fees in CD accounts are rare, but it's smart to verify that you won't pay additional charges to use a CD. Anything you pay will reduce your earnings.
- Joining fees: All of the credit unions we include on our best CD lists are available nationwide, but sometimes you’re required to make a donation to an organization in order to join the credit union. This fee is usually small, but it’s one more hoop you have to jump through to get the CD.
- Penalties: Examine the early-withdrawal penalties, and evaluate how likely it is that you’ll need to cash out early. Weigh the pros and cons of liquid CDs.
Calculate how much extra you can earn by getting the highest rate available, and decide if that’s what you really need. If you have a relatively small account balance, a difference of a few tenths of a percent may not make much difference and there may be other factors that are more important to you.
As you compare banks, you may notice language about compounding frequency (daily or monthly compounding, for example). All other things being equal, more frequent compounding is best. But you can ignore those details by simply comparing each bank’s APY, which includes compounding.
What Is a No-Penalty CD?
Some CDs allow you to withdraw money before maturity. These “no-penalty” or “liquid” CDs can provide flexibility for unexpected expenses and other situations. For example, you might be allowed to withdraw 100% of the money you deposit after six days, but the account pays a guaranteed rate of interest for 11 months.
What’s the catch? In many cases, no-penalty CDs start at a lower rate than standard, inflexible CDs. You enjoy the benefit of flexibility, and the bank has less certainty about how long it can use your money. As a result, you earn slightly less.
Do You Have to Pay Taxes on Interest From CDs?
You typically have to pay tax on the interest you earn from CDs in taxable accounts, including joint accounts, individual accounts, and other types of accounts. If you use CDs in a retirement account, such as an IRA, you generally would not pay taxes on the earnings each year—but you might owe taxes when you take distributions from that account.
Tax rules are complicated, and they change periodically. Ask your tax advisor how to handle the interest you earn from your CDs.
What Are Some Alternatives to CDs?
CDs are excellent tools for growing your money, but other products from banks and credit unions might also do the job.
Savings accounts provide more flexibility when you need money, but they don’t have fixed rates. That can work in your favor when rates rise. But if rates fall or remain stagnant, you might be better off in a CD.
Money Market Accounts
These are similar to savings accounts, but they may make it easier to spend money from your account. Some money market accounts provide a debit card or checkbook for spending, while others may require you to move your savings to a checking account before you spend.
If you prefer instant account access, we have partnered with the following banks to bring you the high-yield savings and money market account offers displayed in the table.
Discover Bank. "Certificate of Deposit." Accessed Jan. 21, 2021.